USD/JPY tumbles to weekly lows, trying to defend 109.00 mark

A fresh wave of greenback selling pressure emerged during the early European session, with the USD/JPY pair tumbling to weekly lows near the 109.00-108.95 region. 

The latest political developments in the US, coupled with fading prospects of any additional Fed rate hike action in 2017 has been one of the key factors weighing on the US Dollar since Wednesday. 

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Adding to this, the prevalent risk-off environment, as depicted by a sell-off in global equity markets was further seen boosting the Japanese Yen's safe-haven appeal and collaborated to the pair's heavily offered tone for the third consecutive session.

With today's sharp fall, the pair has now reversed all of its weekly gains and is down around 200-pips from the 111.00 neighborhood touched on Wednesday, clearly indicating that the near-term selling pressure might still be far from over. 

Today's US economic docket features the only release of Prelim UoM Consumer Sentiment Index and hence, broader market risk sentiment would remain an exclusive driver of the pair's movement on the last trading day of the week. 

Technical levels to watch

Immediate support is pegged around the 108.75-70 region, near four-month lows touched last week, below which the pair is likely to accelerate the fall towards yearly lows support near 108.15-10 zone with some intermediate support near 108.60 level. 

On the upside, any recovery attempts beyond 109.15-20 area now seem to confront fresh supply near 109.55 level, which if cleared might trigger a short-covering rally and lift the pair back towards the key 110.00 psychological mark.